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The Telegram (St. John's)
News, Tuesday, July 12, 2005, p. A1
Court
Company Fights ACOA for Survival
Callahan, Brian
St.
John's-based Nautical Data International (NDI) heads back to
court Wednesday, alleging two federal government departments are
conspiring to sink the company.
"What we have is a conspiracy between DFO
(federal fisheries) and ACOA to bankrupt a Newfoundland company
and put 15 people out of work and terminate a legal
contract," NDI lawyer Tom Kendell told The Telegram Monday.
Digital charts
The company provides ground-breaking digital
navigational charts and related hardware, software and data
products and services for marine, science and engineering.
NDI has made a proposal to creditors that would
see their money returned "dollar for dollar" over a
three-year period, Kendell said. NDI sweetened the pot by
offering to pay off all debts immediately if it wins a larger
breach-of-contract claim against DFO.
"If that amount is high enough, we'll pay
another premium of 10 per cent on top of what's owed,"
Kendell said.
Only two of the 29 creditors have turned down
the offer: ACOA and DFO. Without their support, the proposal -
and NDI - are dead.
On Wednesday, Kendall will try to prove ACOA's
actions are unjust, which would give NDI the percentage needed
to approve its proposal.
"We've alleged that ACOA has voted its
claim for an improper purpose - to support DFO in bankrupting
NDI and terminated the contract.
"That's pretty scary isn't it? You've got
ACOA, which is in the business of creating jobs, now voting
against a proposal that would see them paid earlier and more
money ... to bankrupt the company."
The dispute between NDI and DFO dates back to
Jan. 4, when the company received a tersely worded fax that
stated its 12-year-old contract was being terminated.
It was to run until 2008, with a renewal option
to 2013.
The fax, from the Canadian Hydrographic Service
(CHS), a branch of DFO, cited "over 100 complaints"
from the boating community, the industry and other government
departments about the company's service.
Kendell says the so-called complaints are a
front for Ottawa's real motives - money.
"These complaints have nothing to do with
it. The real reason is that the federal civil servants feel that
this contract today is a mistake - that they shouldn't be
handing over digital data to one company on an exclusive licence.
"They want to do that in-house now."
He noted the Canada Shipping Act was recently
changed. Ships that once had to carry paper charts can now use
digital.
"The future of all of this is digital, and
the revenue that produces. That's where the world is today -
digital."
Savi Narayanan, acting director-general of CHS,
did not return calls Monday.
But in a letter to the editor published in the
May 25 edition of The Telegram, she acknowledged terminating the
deal with NDI "could impact on employment at NDI."
"However, when making the decision, the
minister is committed to minimizing any negative effect on
employment in Newfoundland and Labrador in connection with
replacing the work NDI had been contracted to perform," she
wrote.
"DFO would make use of the technical
expertise in Newfoundland and Labrador in service
delivery."
Kendell, meanwhile, said the only reason NDI
filed for bankruptcy was to defend against DFO's termination of
the contract.
"DFO's actions caused incredible
expenditure of funds, rendering the company insolvent, having to
spend so much money to fight them, and defend themselves.
"This has nothing to do with the
efficiency of NDI or the product it is delivering."
He said he is confident NDI will emerge
stronger than ever and remain in the province.
"You know, every now and then I stop and
shake my head and say, 'Is this Canada? Can this really be
happening?' I mean, what are these guys smoking?
"I mean, at some point in these
proceedings, the people responsible for this will be brought to
task. And they will have to answer for their actions. And I'm
quite confident at that time that this company will be
vindicated and the people who have done this will be
punished."
NDI continues to operate pending the outcome of
court action.
bcallahan@thetelegram.com
© 2005 The Telegram (St. John's). All rights reserved.
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